China reported a more-than-estimated $11.4 billion trade surplus for April as U.S. officials pushed at talks in Washington for faster gains in the yuan.
Today’s number, released by the customs bureau, compared with a surplus of $140 million the previous month and $1.68 billion a year earlier. Import growth slowed to 21.8 percent in April from a year earlier while exports grew 29.9 percent.
At the start of the two-day Strategic and Economic Dialogue yesterday, U.S. Treasury Secretary Timothy F. Geithner said China has been making progress "towards a more flexible exchange rate” and weaning its economy off a dependence on exports. The yuan has strengthened this year to the highest levels since 1993 and the fastest inflation since 2008 may encourage officials to allow more gains to pare import costs.
"The yuan is facing great appreciation pressure” because of inflation, Ma Jun, chief China economist at Deutsche Bank AG, said before the data. Political relations with the U.S. play “a very delicate role” in the nation’s currency policy, he said.
The median forecast of 27 economists surveyed by Bloomberg News was for a $3.2 billion surplus.
The People’s Bank of China set the yuan’s reference rate at a record high of 6.4988 per dollar yesterday and allowed the currency to strengthen 0.9 percent in April, the biggest monthly gain this year.
‘Unjust’ Manipulation Senator Sherrod Brown, a Democrat from Ohio, urged the U.S. administration to press China on the currency issue and also said Congress should pass legislation to protect American workers from an undervalued yuan. Brown and Senator Olympia Snowe, a Republican from Maine, have proposed a measure to allow additional sanctions to address currency issues.
"The Obama Administration has a unique opportunity during this meeting to urge Chinese officials to stop the unfair and unjust currency manipulation that threatens American manufacturing and eliminates American jobs,” Brown said in a statement. “China’s unfair currency manipulation has gone on for far too long, and it’s clear that legislation is needed to level the playing field.”
The U.S. has delayed its semi-annual foreign-exchange report, which had been due on April 15, until after this week’s meetings. The previous report, due on Oct. 15, 2010, was released on Feb. 4 and declined to brand China a currency manipulator while saying the No. 2 U.S. trading partner has made “insufficient” progress on allowing the yuan to rise.
China argues that its currency is not a key cause of global economic imbalances, and highlights the role of U.S. restrictions on Chinese purchases of high-technology products in lopsided trade between the two nations.
April Inflation
In China, consumer prices rose 5.4 percent in March, the most in 32 months, and may have climbed 5.2 percent in April, according to the median estimate in a Bloomberg News survey. The statistics bureau will release inflation data in Beijing tomorrow.
Exports rose to $155.7 billion in April and imports climbed to $144.3 billion, the customs bureau said today. The median forecast in Bloomberg News surveys was for a 29.5 percent gain in overseas sales and a 28.9 percent jump in inbound shipments.
"The price factors that have boosted the import bill recently are expected to ease markedly due to the recent sharp correction in global commodity prices,” Deutsche Bank’s Ma said.
Commodities had their worst weekly plunge since December 2008 last week, with oil declining 15 percent. Higher fuel and raw-material prices had contributed to the nation recording its first quarterly trade deficit since 2004 in the January-to-March period.
Companies benefiting from the nation’s trade gains this year include Cosco Pacific Ltd., part of China’s largest shipping group. Cosco said it more than doubled first-quarter profit, helped by a 20 percent increase in throughput at its container terminals after it added facilities to cope with rising exports of toys, furniture and auto parts to the U.S. and Europe.
